Morrisons slashes fuel prices to under £1 a litre

Morrisons is cutting fuel prices

Morrisons is cutting fuel prices

The fuel retailer says its headline-grabbing new petrol price makes it only the second time since the 2008-09 financial crisis that petrol prices have fallen below £1 a litre.

The RAC has referred to the "darker" side of the type of fuel price cuts Morrisons has announced today - dropping the price of its unleaded fuel down to less than £1 a litre - which heaps more pressure on smaller independent fuel retailers.

Raising retail prices has also become important for OMCs now as the recent steel excise duty hike without resultant increase in petrol and fiscal prices, has substantially brought down its marketing margins from record high level of Rs 12-18 per litre.

It is the first time petrol has been sold nationally for under £1 since February 2016.

This is 9p a litre cheaper than the United Kingdom national average.

That's down to both a price war between Saudi Arabia and Russian Federation, and a steep drop in demand due to the global COVID-19 pandemic.

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The price drop comes as the United Kingdom government announced it would begin the process of easing the coronavirus lockdown from Wednesday. Going by the current trend, crude prices are up over 50 per cent to last months prices when even benchmark Brent crude had slipped below $ 20 a barrel.

Last night, Boris Johnson announced that people in England will now be able to drive to different areas to get exercise.

Ashley Myers, Head of Fuel for Morrisons, said: "This cut will help people who are travelling to work, those shopping for essentials, and those assisting the elderly and vulnerable".

The RAC praised Morrisons for reducing costs to a "fair price" which was "much more reflective" of what the retailer itself was paying to supply the fuel.

"But that cushion is no longer there now and once daily price revision plan starts, auto fuel could see steep rise over the course of few days", said an official of a public sector OMC asking not to be named.

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